Dish TV reports 25% dip in profits in Q1 FY17

Dish TV India Limited (Dishtv) has reported first quarter fiscal 2017 consolidated subscription revenues of Rs. 7,282 million and operating revenues of Rs. 7,786 million. EBITDA for the quarter stood at Rs. 2,646 million compared to Rs. 2,357 million in the corresponding quarter last fiscal. EBITDA margin was 34.0%. Profit before tax was Rs. 631 million while Profit after tax for the quarter was Rs. 409 million.

Global macro remains cloaked in uncertainties. However, with India getting closer to being the world’s fastest growing economy in 2016 its attractiveness from a growth standpoint has become even better. The state of the economy is critical for the success of any business.

Jawahar Goel, Chairman & Managing Director, Dish TV, elaborated, “With the government working on Roads, Railways, Power and other infrastructure and with global energy prices remaining low, the Indian consumer’s propensity to consume is definitely on the rise. Add to that, normal monsoon conditions, government’s notification of the 7th Pay Commission recommendations and you have all the ingredients needed to boost demand and spending. This is good news for service industries like ours.”

Fiscal 2017 started on an optimistic note for the Indian pay DTH industry. While the Delhi High Court is likely to take up hearing of the digitization Phase III matter in August this year, cable operators may have no option than to digitize remaining analog cable networks as the Central Government gears up to auction 700 MHz spectrum to telecom operators. The government is also contemplating utilization of 200 MHz airwaves for mobile telephony.

“Buoyed by digitization, notwithstanding the relative seasonal weakness in 1Q, the industry collectively added around 15% higher subscribers compared to the same quarter last fiscal. Dish TV maintained its lead in incremental subscriber additions during the quarter. Our strengthened distribution in DAS Phase III and IV areas along with the popularity of the Dish TV Insta Care – 4-Hour Service Assurance Campaign were instrumental in helping us maintain an edge over competition. Our regional and mass-market offerings continued to remain crowd-pullers in respective geographies,” said Goel.

In line with its commitment to give its viewers the best in terms of quality and service, Dish TV recently unveiled an all new High Definition (HD) campaign Ab India Banega HD (India would become High- Definition now) along with the introduction of long duration HD packs to further accelerate the adoption of HD services.

“The consumers growing passion for HD has the potential to trigger yet another round of growth, beyond that being driven by digitization, for the DTH industry. Going forward, we would continue to build on our HD advantage while focusing on its sales across the country,” Goel added.

Dish TV has aligned its ongoing efforts, to create and train an efficient, well trained workforce of DTH technicians, with the Pradhan Mantri Kaushal Vikas Yojana (PMKVY). The PMKVY is a reward-based skills training scheme of the Ministry of Skill Development & Entrepreneurship (MSDE), that has the objective of enabling large number of Indian youth to take up industry-relevant skill training.

Ever since inception, Dish TV has trained more than 200,000 candidates in the installation, repair, sales and service of DTH equipment. Going forward, the company intends to continue to impart DTH skill training for human capital development relevant to the industry and provide employment/entrepreneurship opportunities to a similar number of aspirants in the next few years.

The Goods and Services Tax (GST) Bill is likely to be discussed and passed during the ongoing monsoon session of Parliament.

Expressing optimism on the implications of the tax reform, Goel, said, “We continue to be optimistic about margin expansion and ease of doing business that should result from the implementation of GST.”

Expressing his views on other regulatory overhangs, Goel, said, “An industry favourable resolution of the DTH license fee matter should go a long way in ensuring non-discrimination amongst various distribution platforms in the country. We are also hopeful of a just and logical outcome of the currently debated TRAI consultation paper on Interconnection Framework for Broadcasting TV Services Distributed through Addressable Systems.”

To further enhance the digital TV experience for subscribers and build an affordable and fast deployment model for itself, Dish TV recently selected Wyplay’s Frog as the Middleware for its next generation Set-Top-Boxes. Wyplay is an HTML5 browser based system and incorporates all features required for traditional linear broadcast TV consumption, on-demand content and applications distributed over the internet.

Discussing the results, Goel said, “Healthy subscriber additions led to a 12.3% Y-o-Y increase in subscription revenues (on a like-to-like basis). EBITDA margin bounced to 34.0% from 32.0% in the corresponding quarter last fiscal. Net Profit for the quarter was Rs. 409 million leading to FCF generation of Rs. 627 million. Churn for the quarter at 0.7% p.m. remained well within manageable limits.”

Condensed Quarterly Statement of Operations

The table below shows the condensed consolidated statement of operations for Dish TV India Limited for the first quarter ended June’16 compared to the quarter ended June’15.

Quarter ended

Quarter ended

% Change

Rs. million

June 2016

June 2015

Y -o -Y

Subscription revenues

7,282

6,828

6.7

Operating revenues

7,786

7,367

5.7

Expenditure

5,139

5,009

2.6

EBITDA

2,646

2,357

12.2

Other income

119

262

(54.7)

Depreciation

1,613

1,598

0.9

Financial expenses

521

480

8.6

Profit / (Loss) before tax

631

542

16.5

Tax expense

223

-

-

Net profit / (Loss) for the period

409

542

(24.6)

Note:1) Numbers in the table may not add up due to rounding-off.

2) Quarter ended June 2016 subscription revenues, on a like-to-like basis, were Rs. 7,669 million. A growth of 12.3% Y-o-Y.

3) Quarter ended June 2016 operating revenues, on a like-to-like basis, were Rs. 8,172 million. A growth of 10.9% Y-o-Y.